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Investor Warned Over Cryptocurrency Mining in Thailand

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cryptocurrency mining

Thailand’s (SEC) Securities and Exchange Commission has warned investors to take caution and prudence before investing in cryptocurrency mining due to multiple risks and a lack of oversight by Thai regulators.

A recent online and outdoor billboard advertisement invites the public to invest in cryptocurrency mining.

According to the SEC statement, the advertisement encourages the public to invest by purchasing or renting computer equipment or investing in the processing power of such equipment, claiming a high rate of return.

The regulator stated that investing in cryptocurrency mining entails several risks that must be carefully considered, including cryptocurrency price volatility, risks in competitive market conditions, equipment deterioration, and rising electricity costs.

According to the SEC, there may be a security risk to investors‘ data and property, as well as possible scams that do not involve an actual investment.

Furthermore, no regulator oversees the cryptocurrency mining industry under the (DABA) Digital Asset Business Act of 2018.

cryptocurrency mining

A business license is required if an operator wishes to issue digital tokens or provide trading services. Failure to do so will result in statutory penalties.

“The SEC and related agencies are reviewing digital asset regulatory guidelines to provide proper investor protection,” the SEC said in a statement.

Mining cryptocurrency is defined as a miner using a date harvesting device to run a mining computer program and receiving cryptocurrency as a reward when the program’s conditions are met.

In a related matter, the SEC is revising the capital requirements for digital asset operators and will hold a public hearings on the subject from November 10 to December 12.

New business operators will be immediately subject to the new criteria, while existing businesses will have a one-year grace period to comply.

Investor Warned Over Cryptocurrency Mining in Thailand

The new rules require a digital asset exchange operator to increase its paid-up capital from 50 million baht to 100 million baht, while a digital asset broker must increase its paid-up capital from 25 million to 50 million baht.

A digital asset dealer must increase its paid-up capital from 5 million baht to 50 million baht.

According to Kasikorn Research Center, the global cryptocurrency market has been volatile and downtrend since early this year, with several confidence crises.

The failure of certain cryptocurrencies and stablecoins and the insolvency of some cryptocurrency lending platforms harmed market confidence.

According to the think tank, the rise in global interest rates is also a major reason for selling risky assets such as cryptocurrencies.

The total market capitalization of cryptocurrency on coingecko.com stood at around US$950 billion on November 9, 2022, down more than 50 percent since the start of the year.

Bitcoin Cryptocurrency Price Falls Below $37,000

Panic Among Bitcoin and Cryptocurrency Mining Investors

Following a period of crypto volatility, the price of Bitcoin (BTC-USD) fell from $21,400 to $17,150, and is now trading in a price range of $18,100-$18,500, following a slight recovery.

The key reason for the drop below the threshold of $20,000 per Bitcoin, is the Federal Reserves fourth consecutive increase in the interest rate to a record high in the last sixteen years.

Investors continue to withdraw massively from risky assets, increasing tension in both the stock and crypto markets, while more participants with significant financial resources seek to ride out the period of instability in assets that pay dividends or coupons.

The analysis of on-chain activity is one of the most effective tools for tracking and modelling changes in trends in the crypto market and sentiment among Bitcoin users.

The dynamics of new on-chain addresses have continued to fall from multi-year highs in May 2021, when euphoria swept the markets and people opened their wallets and invested in crypto “digital gold.”

Even so, the first signs of a decline in Bitcoin interest appeared when the average monthly rate fell below the 365-day simple moving average, which is marked in pink in the chart below.

Bitcoin Recovers After Falling On Tesla's 75% Stake Sale

Furthermore, a similar situation occurred in February 2018, following which the price of Bitcoin fell by 73 percent in 8 months

At the moment, the momentum of crypto is on the verge of another upward surge, similar to what occurred in November 2018 following a multiple monthly period of low volatility and marked by a renewal of desires for the start of a brand new cycle of growth in Bitcoin demand.

However, this was a futile hope, as the price of Bitcoin fell from $6,600 to $3,300, discouraging the majority of potential investors from purchasing “digital gold.”

Furthermore, during times of maximum stress among market participants the number of new addresses always reached 240 thousand, which we have yet to see.

As a result, this suggests that the current price range Bitcoin is not a bottom before a new cycle begins.

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